Question 1

A business utilizing the "people and rewards" implementation lever would most likely carry out which of the following?

Accepted Answer

The "people and rewards" implementation lever focuses on attracting, retaining, and motivating employees. Providing on-the-job training programs is one way to ensure that employees have the necessary skills and knowledge to perform their jobs effectively, which can lead to increased employee satisfaction and motivation. Instituting just-in-time inventory control, reorganizing the company's management hierarchy, and decentralizing the company's business operations are not directly related to the people and rewards lever.

Question 2

A company makes a decision to expand only by developing new stores internally. The company can best be described as using which of the following?

Accepted Answer

The company is expanding through the development of new stores internally, therefore it is using organic growth. Organic growth refers to a company's strategy to expand through its own resources and capabilities, rather than relying on mergers, acquisitions, or strategic alliances.

Question 3

Which of the following factors relates to staging as described in the business strategy diamond?

Accepted Answer

Staging refers to the sequence and speed of a company's expansion into new markets, products or geographies.

Question 4

Which of the following is not an example of a vehicle as described in the strategy diamond?

Accepted Answer

The strategy diamond describes vehicles as ways to achieve a company's stated goals. Internal development, joint ventures, and licensing are all examples of vehicles, as they are ways for a company to expand or reach its goals. Customer service, on the other hand, is not a vehicle but rather a part of a company's value proposition or customer experience.

Question 5

A company executive makes a presentation to the company's shareholders regarding the major components of the company's business strategy. Which of the following is the executive least likely to mention when explaining the component of economic logic?

Accepted Answer

Internal development is more about how a company grows or expands its capabilities, rather than directly relating to the economic logic of how it will achieve profitability or competitive advantage, which is more about cost structures and value propositions like economies of scale or unique product features.

Question 6

The concept of strategic alignment can best be described as ________.

Accepted Answer

Strategic alignment refers to the need for a company's activities and priorities to be integrated in a way that supports and advances its overall strategy. In other words, the various components of the business should work together harmoniously to achieve the company's goals. Resource allocation, capability development, and industry selection are all important factors in strategic decision-making, but the ultimate goal is to create a cohesive and effective strategy that is aligned across all aspects of the business.

Question 7

_____ is/are not a vehicle described in the business strategy diamond.

Accepted Answer

The business strategy diamond includes arenas, differentiators, economic logic, vehicles, and staging and pacing. Reputation is not one of them. Joint ventures, acquisitions, and franchising are examples of vehicles that could be used to implement a business strategy.

Question 8

A senior manager is reviewing the components of the strategy diamond with her staff. When naming the five major components, she lists all of the following except ________.

Accepted Answer

The answer of A senior manager is reviewing the components...

Question 9

A company hires a business consultant to help identify key differentiators that may increase the company's competitive advantage. In discussing possible differentiators, the consultant is least likely to mention which of the following?

Accepted Answer

Product categories are typically not considered a differentiator in themselves, as they refer to the types of products a company offers rather than unique aspects that set the company apart from competitors.

Question 10

All of the following are aspects of organizational structure except ________.

Accepted Answer

Budgeting is not typically considered a structural aspect of an organization; it is a process or function that may be influenced by the organization's structure, but is not an inherent part of it. Units, hierarchy, and authority are all key components of organizational structure.

Question 11

_____ is/are not one of the levers used to achieve strategic alignment.

Accepted Answer

Profitability is a desired outcome of strategic alignment, rather than a lever used to achieve it. The levers typically used to achieve strategic alignment include reward systems, processes, and organizational structure, among others.

Question 12

Which of the following is not a key component of strategy included as part of the strategy diamond?

Accepted Answer

Each of the other options are key components of the strategy diamond. Staging refers to the pace and sequence of strategic moves, while differentiators are the unique qualities or capabilities that set a company apart from competitors. Vehicles refer to the means by which the strategy is implemented. Evaluation, however, is not listed as one of the key components of the strategy diamond.

Question 13

A company decides to expand its business operations overseas. It plans to enter Asia first, followed by Europe and then Africa. This type of planning is an example of which of the following aspects of business strategy?

Accepted Answer

This planning is an example of staging, which involves sequencing and prioritizing the entry into different markets or geographic locations. The company has planned to enter Asia first, followed by Europe and then Africa, indicating a staged approach to international expansion. Economic logic refers to the way a company creates value and earns returns on its investments, arenas refer to the different markets or customer segments the company competes in, and vehicles refer to the means by which the company enters a market or geographic location.

Question 14

_____ are not an arena described in the business strategy diamond.

Accepted Answer

The business strategy diamond includes four arenas: customer segments, product and service categories, delivery channels, and geographic locations. Mergers and acquisitions are not an arena, but rather a potential strategy that can be implemented within one or more of the arenas.

Question 15

Which of the following would be least likely to drive a company's staging decision regarding expansion into a particular market?

Accepted Answer

While significant financial resources may certainly facilitate and influence the decision to initiate or expand operations in a given market, the other factors listed (brief window of opportunity, need for early wins, urgency posed by technological advances) have more direct and immediate impact on the staging decision.

Question 16

Acme Wholesale Supply is considering expanding its sales operations overseas. Which of the following factors is most likely to have a major impact on Acme's decision regarding staging of the expansion?

Accepted Answer

Resources are crucial for expansion as they determine the company's ability to support new operations, including financial, human, and logistical resources.

Question 17

A research associate is requested by his boss to write a report identifying potential new arenas in which the business might launch overseas operations. Which of the following categories is the associate least likely to include as a potential arena in his report?

Accepted Answer

The associate is least likely to include "customers" as a potential arena because customers are typically the target of operations rather than an arena for launching operations. The other options (channels, product categories, technologies) are more relevant as they represent areas where the business can expand or innovate.

Question 18

A company plans to maximize its profits by charging premium prices for superior customer service. This plan represents an example of which of the following aspects of strategy?

Accepted Answer

The plan to charge premium prices for superior customer service represents economic logic, which is the aspect of strategy that focuses on how a company can create and capture economic value through its business model. This plan is aimed at increasing profits by providing customers with a differentiated service and charging a premium for it. The other aspects of strategy, such as arenas, vehicles, and staging, are focused on defining where a company competes, how it competes, and how it structures its operations, respectively.

Question 19

In the perceptions of consumers, low prices tend to be associated with ________.

Accepted Answer

Low prices are often associated with low quality because consumers assume that companies may have cut corners in order to offer lower prices.

Question 20

The initial plan behind a strategy is best described as the ________ strategy.

Accepted Answer

The initial plan behind a strategy is often referred to as the intended strategy, as it is the strategy that an organization has consciously developed and intends to pursue.

Quiz 1: Introducing Strategic Management